Open Market Operation

(noun)

an activity by a central bank to buy or sell government bonds on the open market.

Related Terms

Examples of Open Market Operation in the following topics:

  • Open Market Operations

    • Open market operations (OMO) refer to a central bank's selling or buying of government bonds on the open market.
    • An open market operation (also known as OMO) is an activity by a central bank (in the U.S. it is the Fed) to buy or sell government bonds on the open market.
    • In practice, however, most assets cannot be traded readily enough to accommodate open market operations.
    • Treasury securities held in the Federal Reserve's open market account, December 31, 2004
    • Define the role and function of an open market operation (OMO)

  • Open-Market Operations

    • This chapter introduces the Federal Reserve's three significant tools for conducting monetary policy: open-market operations, discount policy, and reserve requirements.
    • Moreover, the Fed can use Open-Market Operations, Discount Policy, and Reserve Requirements to implement a monetary policy.
    • Open-Market Operations are the Fed's purchase and sale of U.S. government securities, and its most important tool.
    • Open-market operations have the same effect if the Fed purchased any short-term, liquid securities.
    • Noticing one thing, open-market operations affect the interest rates because the T-bill is a short-term credit instrument.

  • Open Market Operations

    • Open market operations (OMOs) are the purchase and sale of securities in the open market by a central bank.
    • These include the discount rate, the fed funds target rate, and the reserve requirement, and open market operations (OMOs).
    • In the United States, the Federal Reserve Bank of New York conducts open market operations.
    • They are under the oversight of the Federal Reserve Open Market Committee (FOMC).
    • Discuss the use of open market operations to implement monetary policy

  • The Federal Open Market Committee and the Role of the Fed

    • The Federal Open Market Committee is responsible for conducting open market operations in order to achieve a target interest rate.
    • These operations are the primary responsibility of the Federal Open Market Committee (FOMC).
    • To lower the federal funds rate, for example, the Fed buys securities on the open market, increasing the money supply.
    • As mentioned previously, the aim of open market operations is to manipulate the short term interest rate and the total money supply.
    • Describe the structure and operations of the Federal Open Market Committee (FOMC)

  • The Creation of the Federal Reserve

    • The Fed has three main policy tools: setting reserve requirements, operating the discount window and other credit facilities, and conducting open-market operations.
    • The Fed can affect the interest rate by conducting open-market operations (OMOs) in which it buys or sells bonds.
    • The diagram shows how the central bank can increase the money supply by lending money through the discount window or purchasing bonds (open market operations).

  • Control of the Money Supply

    • These actions are known as open market operations and allow central banks to achieve a desired level of reserves.
    • The central bank retains tight control over its nation's money supply through the use of open market operations, the discount rate, and reserve requirements.
    • Open market operations, the most dominant instrument of monetary policy, are the behavior of a nation's central bank to trade or purchase government securities for cash in attempts to expand or contract the total money supply.
    • In recent years, some academic economists renowned for their work on the implications of rational expectations have argued that open market operations are irrelevant.
    • Summarize the argument against the role of open market operations in determining the nation's money supply

  • Designing the Operation

    • Operations management is a strategic function in organizations that adds value to customers and allows businesses to successfully produce goods and deliver services.
    • Operational decisions determine how well these goods and services meet the needs of the organization's target market, and consequently, whether the organization will be able to survive over the long-term .
    • Operations management and planning are common in industries such as the airlines, manufacturing companies, service provider organizations, the military, and government.
    • Operations management touches upon multiple areas of a business, from engineering and research & development, to human resources and accounting.
    • Operations management plays a key role in the success in airline companies.

  • Operations: the logistical rim on the wheel

    • Operations in a startup begin with the composition of a business plan.
    • Marketing Strategy explains what unique maneuvers your venture will under-take to accomplish the businesses goals.
    • Competitive Analysis documents who your main competitors are in the market place.
    • It is highly recommended that you post your new venture's Operations Gantt Chart on a wall in a visible location so that as many people as possible have access to this information.
    • Keep an open mind as you implement your operational plans for the startup.

  • New product: the tangible rim on the wheel

    • Developing a new product is an operational task that goes "above and beyond the call of duty" of utilizing the Operations Gantt chart described in the previous Operations section.
    • A new product bud is blooming: introducing the "New Venture Instructional Manual to Operational Excellence"
    • Brainstorm a list of the day-to-day steps that are taken to develop and market a new product.
    • Stay open and flexible to these new ideas.
    • Entrepreneurial Marketing; Real Stories and Survival Strategies by Molly Lavik and Bruce Buskirk, Module on Savvy Strategies for Marketing New Products, pages 188-190

  • Day-to-Day Needs

    • Operating cash flow refers to the daily cash inflows and outflows generated from business revenues earned, excluding certain costs.
    • Operating cash flow refers to the amount of cash a company generates from the revenues it brings in, excluding costs associated with long-term investment on capital items or investment in securities.
    • They are assets that are readily convertible into cash, such as money market holdings, short-term government bonds or Treasury bills, marketable securities, and commercial paper.